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ADVERTISE IN THE CLAB
-lified column* of The Herald, 3d Page; advertiae ment* there only coat Five OenU a line. VOL. 36.—N0. 59. QUAKER CITY FRAUDS Comptroller Lacey Makes a Lengthy Report. Circumstances of the Closing: of the Keystone Bank. The Blame for Blunders Committed Shifted Upon Others. Bank Examiner Drew Made the Official Black Sheep—John Wanamaker Entirely Exonerated. Associated press Dispatches. Washinoton, June 14.—After careful preparation, and after submission to his superiors, the statement of Comptroller of the Currency Lacey relative to the downfall of the Keystone bank of Phila delphia has been made public by the secretary of the treasury, to whom it is addressed. It is a voluminous docu ment, containing 9000 words, and em bodies correspondence and papers bear ing on the Quaker city's scandal. The statement, which is in the form of a communication to Secretary Foster, bears date June 10th, and runs substan tially as follows: Sib: I have the honor to submit herewith a statement of facts leading up to the final closing of the Keystone Na tional bank and the appointment of a receiver therefor. The first informa tion referred to by me in reference to what has been known as the Lucas de falcation, was contained in a communi cation addressed to me by Bank Exam iner Drew of Philadelphia, dated January 24,1891, and received by me January 2(1. In this communication Mr. Drew says, on entering upon an examination of the Keystone National bank, the (ith instant, he was informed by the presi dent that there would be disclosed a hitherto effectually concealed debt to the bank of its late president, Johu C. Lucas, amounting to $600,000. Drew closed by stating that beyond the directors of the bauk, seven members of the clearing house committee, counsel on either side and himself, no one had any knowledge or suspicion, so far as he could say, that the bank was in any trouble, and he earnestly hoped that no publicity would be given to the affair until the bank should be rehabilitated, or the efforts to that end were found futile. Accompanying this letter was a pre liminary statement of the bank's condi tion, which, after reconsidering all prob able losses, left the capital stock of $500, --000 intact and a net surplus of $5:5,819. Upon receipt of this report, the comp . trailer was confronted with a grave re sponsibility. On January 27th Mr. Drew came to Washington,'aud in an interview with the comptroller stated that in his judg ment, and in the opinion of tbe clearing house committee, the property con veyed to the bank by the Lucas estate was equal iv value to the indebtedness which had bsen concealed, and that in any event the creditors of the bank were entirely safe. It was, however, deemed necessary that additional funds should be placed in the bank, as its re serve had been deficient for a large part of the time since the run in December, and while the real estate conveyed to the bank would ultimately produce a sum equal to the debt which it was to liquidate, the cash of the bank needed to be promptly reinforced, either by the sale of real estate or a reduction of its line of discounts. It was, therefore, after very serious consideration, deemed best for the bank, for its creditors, for other banking associations and for the city of Philadelphia", whose treasurer had an active account in the bank, that Drew should continue the examination of the bank, and promptly place his as sistant, Mr. Jones, in charge of the books, with the understanding that the active directors of the bank should visit it daily. Under these conditions and for these reasons the comptroller did not insist upon the Immediate resignation of President Marsh, although it was distinctly under stood he was to remaiu only so long as his services were absolutely necessary in adjusting the irregularities which had grown up under hie management, as he was, since the death of Lucas, the only person living who was conversant with the operations which resulted so dis astrously to the bank. The comptroller therefore did not close the bank at this time, for the reason that he had no lawful authority to do so upon the facts submitted, and for the further reason that he was ad vised by the bank examiner that the capital of the bank was unimpaired; that the creditors were therefore fully protected, and that prompt efforts would be made to replen ish the cash by a deposit of $300,000 to be made by the leading directors and stockholders, which should place in it funds until its own accounts became available. The statemeut of Lacey then details in extenso the succeeding steps in the business. On January 30th Drew tele graphed that the prospects were encour aging. February 12th Lacey was in Philadelphia and met the leading di rectors of the bank, and it was agreed that the reserve of the bank should be restored and maintained. On February 17th Drew transmitted his complete re port of the bank's condition, and says: "It will take much time to fully untan gle the methods by which Lucas' defi ciency was abstracted." Drew in his letter adds: "That the whole amount of the loss has been ap propriated by the late president and his friends, I am more and more convinced. 1 have felt that the present president, who was cashier under Lucas, has not been involved in the depredation, fur ther than to have been an obedient in strument of a peculating and designing chief; but within a day or two I have been forced to entertain suspicions of him. I hope these suspicions are groundless, but I shall endeavor to sat isfy myself as soon as I can." Drew had laid before the directors the •oomwtroller's conclusions about an as sessment, and while some were willing LOS ANGELES HERALD. to pay, other- feared the order would create another attack on the bank. On February 20th Comptroller Lacy wrote to Drew acknowledging the receipt of the draft of Drew's lull report, and directing him to give an estimate of the exact value of the resources and an es timate of the discount upon each class of investments. "My object in this is, if possible," wrote Lacey, "to arrive at precisely the amount of the deficiency necessary to make up by assessment upon the capital stock. I should be glad to see any com mittee of the board which may visit Washington, but can conceive no better way to put the institution in first-class shape than that suggested by me. One thing is certain that some action is im peratively necessary, and the sooner it is taken the better will be the result." The next communication referring to this matter seems to have been the final and formal report as developed by the examination which had been in pro gress continually since Lacey's commu nication of January 24th. This was dated February 28th, and reached him March 2d. "Having duly considered all the items stated in this report," says Lacey, "it became apparent that au impairment of capital existed to the extent of at least $250,000. Whereupon, under date of March 7th, I levied an assessment of $260,000 upon the association, to make good the impairment of capital to that amount." This assessment was levied under a positive promise made by a committee that visited Lacey that the amount as sessed would be paid in one week at the most. On March 13th Lacey had not been advised of the payment of the assess ment, and on that date wrote Drew ask ing what had been done. On March 14th Drew replied, saying: "The board has not as yet .inaugurated any measures to obtain the assessment, and no portion has been paid in. Al though the old board was re-elected in January last, eeveral of them failed de signedly to qualify, or have tendered their resignations, among them D. P. Nichols, whom I had hoped would ac cept, for the time being, at least, the vice-presidency, and who is president of the Central Trust company. I have earnestly endeavored to supply the va cancies in the board with other desira ble men, but, under the circumstances, few such are available." Drew adds: "Outside of the account of the city treasurer, who has all along endeavored to assist so far as he could by putting every day checks in the bank to cover so far as possible his drafts next day, through other banks, or the Keystone National bank, indi vidual deposits have diminished since February 15th, a little more than $2,000, --000. A large amount could be collected from overdrafts and overdue papers, and, in short, if the directors of the bank would, as I repeatedly suggested, take the work into their own hands, intead of placing it on the president, who is absorbed in other matters necessarily connected with the conduct of the bank under the present embarrassing circumstances, $•100,000, at least, could be collected from these sources within a short time." This letter by Drew concludes thus. "I am greatly disappointed in finding so little active support given by the directors in the effort to rehabilitate the bank." The above reached Lacey on the 16th, and three days later he closed the bank. "The bank" was closed on the 19th of March," continues Lacey, "and did not reopen for business. The order to close was given after an interview with Marsh. He informed me of the fact that certificates representing about 2500 shares of stock in the Keystone National bank had been improperly delivered to John Wanamaker during the lifetime of John C. Lucas, and negotiations for the sur render and cancellation or the same had failed, for the reason that Wanamaker claimed to hold them as a pledge for the payment of a certain sum of money due from the estate of John C. Lucas, and he declined to surrender the stock until the debt was paid. "The comptroller has been criticized for three things.: "First—For having allowed Marsh to remain in office after his confession, aud not causing bis arrest. "Second—For delay in closing the bank. "Third—For delay in appointing a re ceiver. "As to the first matter complained of I have this to say: That I am nowhere charged with any responsibility in ' connection with criminal prosecutions, and a bank examiner is held to have done his duty as soon as he lays before the United States attorney any facts involving crime which may come to his knowledge in the discharge of his duties. Every bank examiner is instructed and expected to do this, and I could not avoid the con clusion that Drew had discharged his duty after reading his letter of January 24th, in which he says he was assisted in securing a.settlement with the Lucas estate by United States District Attor ney Read. "I had a right to suppose that from that time on 10 the final arrest that the United States district attorney was fully informed as to Marsh's conduct; also the clearing-house committee, with the directors of the bank, who were really the responsible parties, and not the examiner. "Second —For delay in closing the bank. I desire to say the comptroller is foverned by the provisions of the act of une 30,1876. The entire force of the criticism is narrowed down to this: That the comptroller, conscious of the exercise of the discretion imposed upon him by the statute, decided that it was wisest and best to impose the lighter of the two penalties which the law provides, and give the bank four teen days in which to pay an assess ment, under section 6305, rather than immediately order it closed, with all that such a disaster means. "Third —For delay in appointing a re ceiver. This criticism is of very little importance. In any event it has been pretty fully discussed already. "In closing this branch of the sub ject, in justice to one whose name has been brought into the discussion, I desire to say that Hon. John Wanamaker has never,. directly or indirectly, suggested or solicited one day's delay in the closing of the bank, nor in the appointment of a receiver, as appears by a telegram hereinafter quoted. In fact, I have met him but once during the present year, MONDAY MORNING. JUNE 15, 1891. • 3 ; , and that meeting was the 21ft day of March, at the sugges tion, and in the presence of A. B. Nettleton, acting secretary of the treasury. This interview was on tbe day after the suspension of the Key- Btone bank, and he substantially con firmed the information I received from Marsh, and said he held as a pledge cer tificates representing about 2500 shares of stock in the Keystone bank. I urged him to use his influence in aid of the efforts being made to reopen the bank. I failed, however, in my attempt to enlist him in the enterprise, and so ended all communication between us, excepting the following tele gram, dated Washington, April 29th. "Marsh came down last night to say it was reported you intended to appoint a receiver unless something more defi nite was done today. I believe nothing more definite was done today. I be lieve nothine would suffer from giving .them twenty-four hours longer, at the end of which they may put on paper something more definite to be presented to you. From what he gays, they are getting along pretty well in securing subscriptions to new stock. I would recommend that the appo:n*ment of a receiver be deferred, say one day, until he has an opportunity to state some thing more definite. (Signed) "John Wanamaker." In concluding this statement, I deem it my duty to say that in my opinion several reports made by the bank ex aminer did not reflect tho true condition of the bank under considera tion. The degree of blame, any, which property attaches to Drew is yet to be ascertained. In the meantime, however, he has been directed to suspend examinations until the facts are submitted and a conclusion reached." Philadelphia, June 14.—United States District Attorney Read said tonight in regard to the statement of Comptroller Lacey, that he (Lacey) supposed him to be in full possession of knowledge of the criminal acts of Marsh: "I wish to say positively that I had no knowledge of any criminal act by any living official, until after the bank closed. 1 did not know until after the bank closed that Marsh's reports to the comptroller of currency were false." TERRIBLE DISASTER. A HORRIBLE RAILWAY ACCIDENT IN SWITZERLAND. A Bridge Collapses Under the Weight of an Overorowded Train—Sixty People Killed and Hundreds Injured. Bebne, June 14. —A horrible accident occurred on the Muncben, Stein and Baßle railway through the collapse of a bridge beneath a heavily loaded excur-* sion train. The train was crowded with people on the way to attend a musical fete. Sixty persons were killed out>, right, while hundreds were injured.' Two engines and the first car plunged into the river, and all the passengers in the car were drowned. Two cars re mained suspended from the bridge. All the trainmen were killed; thirteen cars were saved. The musical fete at Hnnchenstein was abandoned as soon as the news of the accident arrived, and hundreds of villagers hurried to the scene to assist in rescuing tbe victims. The bridge was an iron skeleton structure, which was considered well built and substan tial. The only apparent reason for the collapse is that the train left the rails and threw its entire weight on one side of the bridge. SUNDAY CLOSING AT TACOMA. The Saloon-Keepers Carry the War Into Africa. Tacoma, Wash., June 14. —This has been the most extraordinary Sunday in Tacoma's history. A few weeks ago the anti-saloon association began a crusade against open saloons on Sunday. Prose cutions were instituted under the state law, and a conviction was secured in a test case against saloon-keepers in the municipal court laßt Friday. Several convictions had previously been secured against gambling houses, and when a decision was rendered against the saloons, a large proportion of the population looked aghast. The saloonkeepers' union yesterday de cided to close all saloons. As tbe state law also includes every other kind of business except undertakers, livery sta bles and hotels, the saloonkeepers de termined that if one should close all should, and served notices accordingly. The result is that not a saloon, gambling house, restaurant, cigar or news-stand has been opened today. Only one con fectionery and two or three fruit stands in the city dared to keep open, and they will undoubtedly be prosecuted by the saloonkeepers. London Laundresses Agitating. London, June 14. —The laundresses of London, supported by numerous trade societies, aggregating 8000 persons, held a demonstration in Hyde Park today. Louise Michel harangued the crowd from a socialist platform. A resolution car ried to the effect that the laundresses should be assisted to secure the benefits of the factory act. A Half Wheat Crop In France. Pahis, June 14. —Inquiries instituted by a trade journal in over 400 wheat growing districts resulted in the compil ation of a report setting forth that the total wheat crop of France this year will amount to a little over half the average crop. A Revolt In Arabia. Constantinople, June 14. —The Arabs at Yeomen have revolted and attacked the imperial troops, forcing them to re treat. The troops lost several officers and 100 men. The grand council has decided to dispatch 10,000 troops from the Syrian garrison. A River Captain Murdered. Helena, Ark., June 14.—Captain W. W. Holt, who has charge of the transfer boat at this place, was killed last night by a watchman of the boat, James Woods. Holt had reprimanded Woods for neglect of duty. Bismarck 111. Rkrun, June 14. —Prince Bismarck is suffering from lumbago. FIRE IN HER HOLD. The City of Richmond's Per ilous Voyage. Four Days at Sea With a Carg-o of Burning; Cotton. A Gale Blowing and the Water Too Rough to Lower Boats. Terrible Suspense Suffered by the I'anlc- Strlcken Passengers—The Flames at Last Subdued. Associated Press Dispatches. Queenstown, June 14.—The steamer Servia, which left New York June 6th, arrived today. The captain reports that on mid.light, Thursday last, he sighted the Inman line steamer City of Rich mond, from New York, June 3d, bound for this port and Liverpool. The latter vessel was flying signals of distress, and the Servia bore down to her to offer as sistance. Captain Redford, of the City of Richmond, reported his cargo on fire, and the Servia stood by and steamed slowly by the side of the City of Rich mond until Brow Head was sighted. Captain Redford reported that on Tuesday, at midnight, a lady cabin passenger, upon gettingout of her berth, noticed that the floor of her stateroom was very hot. She immediately gave the alarm, and an examination was qtuckly made. This resulted in the discovery of smoke issu ing from the forehold, aud the smell indicated that the cotton in the hold, of which the vessel carried 2,000 bales, was on fire. In less than three minutes all the passengers, including those in the steerage, were on deck. Most of them hurriedly left their berths and rushed" 1 on deck scantily attired. Large volumes of water were poured down upon the burning cotton, but with small effect, and until the steam fire annihilatora were used, no diminution of the fire was visible.. While the captain and engineers were trying to get the fire under control, an other scene presented itself on deck, under the eyes of the anxious but well behaved crowd of passengers. Pro visions of all sorts were being carried by the stewards to tbe ship's_ boats in view of the possible necessity of abandoning the vessel. Throughout the period of alarm a gale was blowing, and the ship rolled heavily. During the dark hours of suspense, the most of the passengers were perfectly calm, most of them making preparations to leave the ship. Until daylight, on Wednesday, the ♦xtent-wf tbe fire was .not known, so - dense was the smoke enveloping the 1 decks. The 3ea, too, became so heavy it would have been almost impossible for the passengers and crew to put off in boats if such a course had been deemed necessary. Soon after daylight, how ever, the captain was able to assure the people that there was no immediate danger. But. although tbe fire had been checked, it remained smoldering in the mass of cotton, and might bieak into flames at any moment. It was impossi ble to discover its extent, owing to the fact that every aperture in the vicinity of the hold had to be closed in order to prevent the flames from being fanned by the gale. The stewards continued the prepara tions to abandon the ship, and had 2000 pounds of beef cooked for the boats. Hopes of relief came in the morning when the vessel, Counsellor, was sighted. After an interchange of signals she agreed to remain alongside the distressed steamer. Throughout Wednesday the crew continued to pour water and steam upon the burning cotton. In the evening an attempt was made to reach the hold, for the purpose of discovering if possible the extent of the fire. Four smouldering bales were taken out of the hold, when it was found to be imperative to shut up every thing in ojder to exclude the air. All of Thursday the situation contin ued much the same. There were occa sional outbursts of dense Smoke from the hold, but nO flames were visible. There was a heavy sea running all day. Toward midnight the Servia bore down toward the two vessels, and agreed to stay by the City of Richmond. The latter and the Servia then went ahead at full speed, leaving the Counsellor astern. On Friday the fire appeared to shift from time to time to different parts of the hold, but seemed to be lessening in intensity. On Saturday no smoke was visible, and it was supposed the fire was out. A number of cabin passengers were forced to abandon their cabins in conse quence of the fire, and had not changed clothing for four days. The origin of the fire is supposed to have been spon taneous combustion. The scene on deck after the discovery of the fire was remarkable. Many groups of women prayed fervently, while others were crying. There were 140 barrels of oil stowed close to the burning cotton. Luckily the flames did not communicate to the oil. It is be lieved the fire was completely subdued before the City of Richmond reached Queenstown. The vessel has proceeded for Liverpool and is declared to be all right. A passenger says it was a fearful night. The wind was screeching through the rigging, and the seas were washing over the decks. There was little hope of safety in case it should become neces sary to take to the boats. The suspense was terriblo, but all bore up splendidly. The intermediate and steerage passen gers were comfortably installed in the saloon, aw ay from the smoke and fumes coming f: om th burning cotton. Africa i ( arbarity. Berlin, June 14. Advices from the Punitive expedition sent into the in terior of the Cameroons say the natives cruelly tortured German prisoners be fore executing them, and that many of the prisoners committed suicide in order to escape torture. A suit with an artistic cut and fit, first-class workmanship and linings, can be had at H. A. Greta, 125 W. Thud st. BARGAIN WINDOW! Just to whet the appetite of the Bargain-hunters, we i have dressed, this week, a genuine Bargain Window in Furnishing Goods. Here is a list of what the window contains: Seamless Sox for ioc; worth 20c Nightshirts for 50c; worth 75c Negligee Shirts for 50c; worth 75c Boys' Stockings for ioc ; worth 20c Boys' Knee Pants for 25c ; worth 75c Unlaundered White Shirts for 50c ; worth 75c Neckties for 20c; worth 35c Goatskin Gloves. for 4oc; worth 75c Men's Underwear for 50c; worth 75c And many other articles which lack of space does not permit us to mention. Take our word for it, these are all genuine bargains and trade stimulators. , , Cor. Spring and Temple Streets. $30 $35 SU,TS -^^^ SU,TS - We have Just Received a very Large Stock of the Celebrated McGregor Scotch Suitings, in all the New Colorings, which we are making up to order in the popular Cutaway and Sack Suits, at the above prices. These Goods are Handsome and Durable. 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From organization to January l 891, it has paid back in cash to its members and now holds securely invested for future payment $451,370,169, OVER SIXTY TWO MILLIONS OF DOLLARS MORE than ever received from them, besides paying all taxes and expenses for the past forty-eight years. A record not even remotely approached by any other company. It issues every legitimate contract connected with human life and its policies are the most liberal and profitable known to underwriting. For rates or description of the company's bonds, consols, and investment securities, or life and endowment policies, address, giving date ot birth, Southern Department, Pacific Coast Agency, Los Anoei.es, Calif., 214 South Broadway. Telephone 28. ALBERT D. THOMAS, Manager. GEO. A. DOBINSON, Local Aomtt. TjX)R HELP WANTED. BTT " oatloQg Wanted, Hotuee and Rnoma to Rent, Sale Notloea, Busluwh Chances and Frofet ■lonal Carda, see 3d Page. FIVE CENTS.